Corporate social responsibility in the wake of the Asian tsunami: Effect of time on the genuineness of CSR initiatives

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Summary

This paper reports the findings of a study examining the influences if any, passage of time has on the three attributes of organizational virtuousness; human impact, moral goodness and unconditionality of social benefit. Interview data collected at 11 and 35 months after the Boxing Day Asian tsunami reveal how two leading Sri Lankan private sector organizations, Unilever (Sri Lanka) and Brandix engaged in corporate social responsibility initiatives. This paper explains how genuine intentions of engaging in CSR activities could generate outcomes such as enhanced reputation that improve the profitability of the firms, and consequently, how these are likely to raise doubts about the moral intent of the tsunami related CSR initiatives. This paper concludes by discussing implications and areas for further research.

Introduction

Based on a follow-up study to Fernando (2007), this paper seeks to examine, what influences if any, passage of time has on the three attributes of organizational virtuousness; human impact, moral goodness and unconditional societal betterment. As societies’ needs evolve over time, it is likely that the social expectations of corporations’ social responsibilities also evolve. By comparing interview data collected after 11 months (see Fernando, 2007), and 35 months since the Boxing Day Asian tsunami, this paper provides input on two leading Sri Lankan private sector organizations, Unilever (Sri Lanka) and Brandix’s corporate social responsibility (CSR) initiatives. The data collected from 28 interviews reveal how the passage of time influences the three attributes of organizational virtuousness; human impact, moral goodness and unconditionality of social benefit. Based on the findings, this paper raises doubts about placing too much emphasis on the genuineness of CSR initiatives. It explains how firms with genuine intentions of engaging in CSR activities could yet generate outcomes such as enhanced reputation that improve the profitability of the firms, and how these are likely to raise doubts about the moral intent of the CSR initiatives. This paper concludes by discussing implications and areas for further research.

The last three decades have witnessed a lively debate over the role of corporations in society (Basu and Palazzo, 2008, Godfrey and Hatch, 2007, McWilliams et al., 2006). More influential CSR theories such as the stakeholder theory (Donaldson and Preston, 1995), stewardship theory (Donaldson and Davis, 1991) and the philosophical perspective (Windsor, 2006) of CSR focus on the obligation arising from an implicit social contract between society and business at a given point in time. Carroll proposed ‘the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organisations at a given point in time’ (1979, p. 500). Thus, organizations are expected to be responsive to societies’ needs and wants at a given point in time, and optimizing the positive effects and minimizing the negative impact of its actions on society (Lantos, 2001).

Conceptually, Windsor (2001) notes that there are significant difficulties in distinguishing whether business behavior is truly moral conduct or instrumental adoption of an appearance of moral conduct as useful reputational strategy. He argues that voluntary acceptance of material loss may serve to identify moral conduct, but material gain cannot serve to isolate reputational strategy. Empirically, despite considerable effort in the academic literature to discover a reliable relationship between responsible conduct and financial performance, the evidence remains mixed at best (Windsor, 2001). Increasingly, management researchers are turning to psychology literature to enrich the management, organization and understanding of CSR (for example, Jones, 1991, Cameron et al., 2004, Godfrey, 2005, Bright et al., 2006, Bright, 2006). This paper relates to an emerging and under-researched area of CSR mainly influenced by psychology, the genuineness in CSR activities (Bright, 2006, Godfrey, 2005).

Genuineness can be explained as the ‘perception that an organization’s philanthropic activities are well intentioned and not merely for instrumental gains’ (Bright, 2006, p. 752). The idea of genuineness is particularly relevant to CSR activities because consistent CSR activities could generate moral capital by promoting corporate reputation (Bright et al., 2006, Cameron et al., 2004). Moral capital can act as a social license, a form of insurance against unforeseen risks to corporate image, reputation or profits (Godfrey, 2006). One way to examine the genuineness of CSR initiatives is through organizational virtuousness.

Organizational virtuousness is necessary for genuineness in CSR initiatives (Bright, 2006), and is characterized by three attributes; human impact, moral goodness, and unconditional societal betterment (Bright et al., 2006). It ‘broadens the orientation to include fostering the moral good, not just redressing the bad, and producing human effects and social betterment, all without expectation of personal return’ (Cameron et al., 2004, p. 770). Highlighting the dearth of scholarship on positive organizing, Cameron et al. (2004) identify the effect of time on positive organizational variables such as organizational virtuousness as an area with scant empirical investigation.

The rest of this paper develops as follows. In the next section, I introduce organizational virtuousness and the state of CSR in Sri Lanka before and after the Asian tsunami. Thereafter, I continue with the methodology and case descriptions. The subsequent section includes findings and then, a discussion relating to organizational virtuousness. Finally, I turn to implications and concluding thoughts.

Section snippets

Organizational virtuousness

Cameron et al. (2003) comment that positive organizational scholarship brings together ‘new variables, processes, and relationships that have been seldom uncovered and explained’ (p. 365). One such variable is organizational virtuousness. Virtuousness is the ‘pursuit of the highest aspirations in the human condition. It is characterized by human impact, moral goodness, and unconditional societal betterment’ (Bright et al., 2006, p. 249). As these researchers have pointed out, several writers

Pre- and post-tsunami CSR in Sri Lanka

As highlighted in Fernando (2007), in 2004, a comprehensive survey was undertaken by an international NGO, International Alert, on the CSR perceptions and attitudes of the Sri Lankan public and business organizations. The survey found that while a slight majority of people feel that business should do more for the social good, they mistrust corporations and express fears that the private sector exploits consumers and destroys cultural values (International Alert, 2005).

In the business

Methodology

This study seeks to examine, what influences if any, passage of time has on the three attributes of organizational virtuousness; human impact, moral goodness and unconditionality of social benefit. Case Studies are defined by Yin ‘as an empirical inquiry that investigates a contemporary phenomenon within its real life context, when the boundaries between phenomenon and context are not clearly evident, and in which multiple sources are used’ (1989, p. 23). Case studies of Unilever and Brandix

At 11-months (t0t1 period)

All interviewees described the post-tsunami experience using the phrase ‘CSR’. Both companies had formal CSR initiatives in place. For Unilever (Sri Lanka), it revolved around the 3G mantra, our brands, our people and our community. Reflecting the worldwide corporate mission of Unilever Plc, adding vitality to life, Unilever (Sri Lanka) attempted to deliver positive results to the community when pursuing its brand and people goals. Both organizations admitted that they ‘played to their

Discussion: company expectations and virtuousness

Since the Asian tsunami struck Sri Lanka on Sunday, 26 December 2004, each of the two organizations initiated CSR programmes in the t0t1 period (0–11 months) and extended these in the t1t2 period (12–35 months). However, each organization’s CSR response and outcomes were different. For example, while Unilever (Sri Lanka)’s focus on CSR was community based projects, Brandix’s focus was on environmental CSR. It can be expected that firms will attempt to balance economic, legal and ethical

Implications and concluding thoughts

The findings reveal that at both timelines, neither of the companies expected any second order goods from the tsunami relief initiatives. However, these initiatives generated outcomes such as enhanced reputation that help improve the profitability of the firms. Thus, even if the two firms engaged in tsunami related CSR initiatives with genuine moral intent, increased reputation and profitability are likely to raise doubts over the moral intent of the tsunami related CSR initiatives. Therefore,

Acknowledgment

An earlier version of this paper was presented at the 24th European Group for Organizational Studies Colloquium, Amsterdam, 2008.

MARIO FERNANDO holds a PhD and is a Senior Lecturer at the School of Management and Marketing, University of Wollongong, Australia. His current teaching and research focus is on responsible leadership, strategic corporate social responsibility and ethical ideologies of Australian managers. His work has appeared in the Journal of Business Ethics, and Leadership & Organization Development Journal. His most recent work was published in a book titled Spiritual Leadership in the Entrepreneurial

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